by Daniel Stefanski | Feb 1, 2024 | News
By Daniel Stefanski |
Arizona’s Attorney General is standing with the state’s Senate President to protect the financial interests of families.
Last week, Attorney General Kris Mayes sent a letter to the IRS Commissioner, requesting the agency “reconsider its decision to tax the 2023 Arizona Families Tax Rebate.”
In a statement that accompanied her announcement, Mayes said, “The IRS should act promptly to reverse this decision and provide clear guidance to Arizona taxpayers as tax season nears. If they do not, my office is prepared to examine all legal avenues to ensure these dollars stay in the pockets of Arizona taxpayers.”
The news from the state Attorney General’s Office follows communication from Arizona Senate President Warren Petersen over this matter. Earlier this month, Petersen issued a press release to share that he was “working diligently to come to a resolution that will protect the more than 700,000 recipients from having to give the federal government a portion of [the rebate] this tax season.”
Petersen also thanked Mayes’ office for “reaching out to us on this matter,” though he cautioned that “litigation likely isn’t the best approach.”
In her letter to the IRS Commissioner, Mayes argued that “the full Tax Rebate should be excludable from federal tax under the general welfare exclusion,” and that “at a minimum, the Tax Rebate should be excluded from federal tax to the extent it does not exceed state taxes that were actually paid and that were not deducted from federal income.”
The state’s top cop pointed to past IRS guidance and states where the agency “determined to be excludable from federal tax in February 2023,” such as Alaska, California, Colorado, Delaware, Idaho, and Indiana. She added that different guidance from the IRS established other exclusions that benefited four states – Georgia, Massachusetts, South Carolina, and Virginia. In closing, Mayes wrote that “it would…be fundamentally arbitrary and inequitable to preclude Arizona and its taxpayers from relying on that guidance, particularly given the materially similar (and less restrictive) state programs that the IRS found to be nontaxable in whole or in part last year.”
Mayes asked for the IRS to reply to her letter “by return letter or through amended published guidance no later than February 6.”
Daniel Stefanski is a reporter for AZ Free News. You can send him news tips using this link.
by Corinne Murdock | Jan 18, 2024 | News
By Corinne Murdock |
On Tuesday, Attorney General Kris Mayes announced that the Arizona Commerce Authority (ACA) violated the Arizona Constitution’s Gift Clause.
Mayes determined that the ACA’s high-dollar “CEO Forums” — in which ACA would court CEOs with accommodations, experiences, and refreshments — were unconstitutional, namely noting the massive expenditures without returns last year under Hobbs. In a letter to ACA general counsel, Mayes explained that the gifts corporate executives were impermissible because they didn’t create concomitant public value.
“The current structure of the CEO Forums confers significant value on invited private executives and their guests without obtaining any identifiable value for the state,” said Mayes.
ACA is a state agency dedicated to growing and diversifying the state economy by attracting, expanding, and retaining businesses. ACA is managed as a public-private partnership.
Mayes’ findings confirmed a report from the auditor general last September which determined that the ACA may have misspent about $2.4 million to court private CEOs between 2018 and 2023. A majority of that — over $2 million — occurred last year alone under Hobbs’ first year as governor.
From 2018 to 2022, ACA spent about $356,000 in total on forums for corporate executives: an average of $89,000 per year, about 4.5 percent of what ACA spent on last year’s forum.
Last year marked the most expensive CEO Forum under investigation. The forum was planned around the Super Bowl and Waste Management Phoenix Open; ACA spent over $2 million on corporate executives, and Gov. Katie Hobbs was one of the recurring featured experiences.
In Mayes’ decision on Tuesday, she pointed out last year’s forum specifically.
“While the ACA may hold forums that confer a nominal value on attendees, its past forums, including last year’s $2 million Super Bowl forum and its planned 2024 Forums, do not come close to meeting that requirement,” said Mayes.
As part of last year’s forum, ACA gifted corporate executives and their guests rooms; in-state transportation; event tickets to the Waste Management Phoenix Open VIP Skybox, an NFL Owners Party, a Super Bowl VIP Tailgate Party, the Super Bowl Experience, private viewing suite for the Super Bowl, and concerts associated with the Phoenix Open and Super Bowl; theater tickets; regular season football game tickets and parking passes; lunch invitations with NFL leadership; and Super Bowl Host Committee VIP Golf Tournament tickets.
ACA admitted in a December response to the attorney general that they couldn’t attribute direct causation between CEO Forum attendance and a decision to locate a project in Arizona. Mayes declared that the inability to show cognizable economic value received for their expenditures constituted a violation of the Gift Clause.
“ACA’s responses to our office’s inquiries demonstrate that it expends considerable funds on simply achieving attendance at the CEO Forums even though there is no public benefit from an executive’s private ‘changing perception and increasing sentiment’ about Arizona,” wrote Mayes. “ACA counts non-binding commitments to locate a project in Arizona as ‘project wins.’”
Up until the Tuesday determination by Mayes, ACA was planning on spending another million on corporate executives this year.
ACA planned to spend over $1 million on two forums this year for the NCAA Final Four Basketball tournament and the Waste Management Phoenix Open. If the costs were split evenly, each forum would cost around $400,000 more than the individual 2018-2022 forums held under former Gov. Doug Ducey.
Mayes pledged to prevent the ACA from issuing future gifts to private entities.
Corinne Murdock is a reporter for AZ Free News. Follow her latest on Twitter, or email tips to corinne@azfreenews.com.
